Kaiser Daily Health Policy Report

Tuesday, November 21, 2006

Prescription Drugs

      FDA has reached an agreement with the pharmaceutical industry that would require companies to pay fees to the agency for evaluating television advertisements in exchange for quicker reviews of the ads, the Wall Street Journal reports. Under the agreement, pharmaceutical companies would pay FDA $40,000 to $50,000 at the beginning of each year for each television ad campaign they planned to air. The proposed fees would go toward hiring new FDA staff to review the ads, according to people familiar with the plan. The annual fees could increase if FDA does not meet its target goal of $6 million annually for the program. In addition, in the program's first year, companies will be required to pay double to create a reserve fund. In exchange, FDA will phase in a requirement that agency staff review drug companies' ads within 45 days. The proposal is being submitted "in tandem" with a separate proposal that would require companies to pay new user fees to FDA to review new-drug applications, the Journal reports. User fees will generate about $300 million for the agency this fiscal year, and under the tentative agreement, that amount would increase by about one-third next year, according to those familiar with the proposal. About $30 million of the increase would be used for safety-related activities, including post-market surveillance of drugs' side effects. FDA in exchange would review new-drug applications within about 2.5 months, people familiar with the proposal said. Both proposals have to be approved by HHS and Congress. If approved, the programs would take effect Oct. 1, 2007. "The proposed agreements reflect the pressure on both the drug industry and the FDA to show that they are taking steps to address critics' concerns about drug safety and pharmaceutical promotions," the Journal reports. However, the proposed agreements "are likely to be a first step in what will be a far broader debate over whether, and how, to reform FDA" as Democrats take control of Congress, according to the Journal. The Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization, the two trade organizations that represent the drug industry, declined to comment. An FDA spokesperson also declined to comment (Wilde Mathews, Wall Street Journal, 11/21).